Spiro J. Verras Blog

Monday, June 27, 2016

The Need to Include Planning for Long-Term Care in Your Estate Planning

Why should you include planning for long-term care in your estate planning?

Seniors are gradually becoming a larger proportion of the American population.  The U.S. Census Bureau predicts that this growth will become more and more rapid in the future. By the middle of the next century, it is estimated that there could be more people over 65 than people under 18. This means that planning not just for retirement, but for an extended lifespan is becoming increasingly necessary. For those who have the foresight to be proactive in planning for their later years, planning for long-term care is a practical reality. It is always wise to work with an experienced estate planning attorney when attempting to provide for eventualities.

It is projected that by the year 2020, 12 million Americans over the age of 65 will need assistance in their daily activities. This translates into two-thirds of adults over the age of 65 who will require some form of long-term care, possibly including assistance in eating, bathing, dressing, toileting, and/or transferring from bed to chair. This means that your estate planning should include preparing for long-term care.

Why Long-Term Care Insurance Is Necessary

Most people have still not come to the realization that there are many benefits to long-term care insurance. Even though $219.9 billion (about 9.3 percent of all U.S. personal health care spending) was spent in 2012 alone, the majority of the population doesn't invest in long-term care. The problem is that their so-called "back-up plans" are typically inadequate. These plans include Medicare, which does not cover ongoing long-term care, and family support, which takes a terrible toll on family members -- physically, emotionally, and financially.

Options for Long-Term Care

One of the options for long-term care is having family members assist. For most modern families this is unrealistic since the children of the elderly are either likely to still be employed or, if they are retired, old enough themselves to be unable to devote themselves to the process of giving 24-hour home health care to their loved ones.

Some people feel that, if they maintain healthy lifestyle habits over the course of their lifetimes, they will remain healthy and fit until they die, never requiring long-term health care. Sadly, this is not realistic, since disease or disability can strike any of us at any time, and the risk of becoming incapacitated clearly increases as we grow older, even if we eat a healthy diet, avoid unhealthy habits, and continue to exercise.

Another option for those working with estate planning attorneys to prepare for their futures is to have a savings account especially marked for healthcare savings.  Such an account has a tax-free advantage available to U.S. taxpayers who have high-deductible health plans.

Still another way to infuse your estate planning with assets earmarked for long-term care is to find an insurance policy that offers total long-term coverage for as long as it may be needed. Generally speaking, however, such a policy carries of maximum benefit of approximately $215, 000 of a maximum of about 4 years. Clearly, in some cases, this won't last long enough to solve the problem. Even so, one advantage of long-term care insurance is that it offers an inflation-protection option that will protect your benefits over time.

If it's too late to plan ahead, then it may be time to consider eligibility for government assistance to help pay for the costs of long-term care. Wartime US veterans or their surviving spouses whose care costs exceed their income may be eligible for the VA Aid & Attendance pension. Finally, Medicaid provides coverage for institutional care, although qualifying for this program may require complex legal planning in order to protect your assets. When you work with a highly skilled elder law attorney in Florida, you can rest assured that your lawyer has the knowledge and expertise to guide you not only to preserve your assets but to provide for a secure future for you and your loved ones.

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